January 24, 2012
Volume: 16
Issue: 2
Top Stories
RWE, Brain Developing Novel CO2-Conversion Schemes; Could Expand to Oil Refining
MAN Sees Diesel-Electric Hybrid Trucks Grabbing More Market Share
‘Greens,’ Public-Health Groups Urge U.S. EPA to Adopt ‘Tier-3’ Gasoline Sulfur Limits
Obama Administration Rejects Keystone XL Pipeline Permit
Novel Sulfur-Averaging Scheme Proposed for IMO Marpol Annex-VI Compliance
‘Electrification Leadership Council’ Aims to Boost EV Markets
Drop-Off in Natural Gas Hedging Could Point to 2013 Output Pullback
Profitable U.S. Refiner ULSD Exports: Give U.S. EPA Some Credit
Mounting Losses Force Hovensa St. Croix Refinery Shutdown
OriginOil, U.S. DOE Team Up to Convert Raw Algae into Renewable Crude Oil
Study: Refinery Closures, Gasoline Rule Could Drive Fuel Prices Up in W. Pennsylvania
New LNG-Powered Offshore Supply Vessels Seen Starting a Trend
Dow Taps UOP Technology to Convert Shale NGLs into Propylene
Market Report
Fortnight Market Snapshot: ICE Brent Futures and ICE Gas Oil Futures
IEA: ‘Economic Weakness’ Trimming 1Q-2012 Global Refinery Runs
Cellulosic Ethanol: Navigating What’s Mandated and What’s Possible
Scientists List Top Measures to Slash Non-CO2 GHG Emissions
European Commission Expert Group Ranks Alternative-Fuel Priorities
News from Americas
U.S. Diesel Car Sales Jumped 27% in 2011
Tesoro to Divest Kapolei Refinery, All Hawaii Assets
U.S. Refiners Churning Out Distillates at Record Rate; ULSD Profits Key
More Executive Appointments Announced for Phillips 66, ConocoPhillips
Despite Court Setback, CARB Continues Low-Carbon Fuel Standard Work
News from Middle East / Asia
UAE Diesel Subsidies Thwart Biodiesel Market Expansion
Indonesia Earmarks US$436 Million for 110 CNG-Refueling Stations
Foster Wheeler Wins Petron Refinery-Upgrade Contract
Wärtsilä Wins Contracts for Dual-Fuel Power Plants in Bangladesh
Cat to Expand China R&D Center
China Yuchai Targeting 9% Jump in 2012 Diesel Engine Sales
News from Europe / Africa
Jacobs Wins Contract from Shell Germany for Refinery-Connection Project
Neste Oil Completes ‘NExBTL’ Biojet-Fuel Test Flights with Lufthansa
Repsol Shuts Bilbao CDU, FCC on Poor Refining Margins

News from Americas

U.S. Diesel Car Sales Jumped 27% in 2011

The Diesel Technology Forum (DTF) announced January 10 that sales of new diesel automobiles in the U.S. increased by a 27.4% in 2011 over 2010, citing information compiled by HybridCars.Com and market researchers Baum and Associates.

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Tesoro to Divest Kapolei Refinery, All Hawaii Assets

San Antonio-based Tesoro Corp. announced January 10 its intent to sell its Hawaii operations, including the 94,000 barrel-per-day (b/d) Kapolei refinery, operations at 32 retail stations and all associated logistical assets.

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U.S. Refiners Churning Out Distillates at Record Rate; ULSD Profits Key

The U.S. Energy Information Administration (EIA) on January 6 released a report showing that U.S. refiners and blenders are producing record amounts of middle distillates (diesel and heating oil), sparked by much higher margins on ultra-low sulfur diesel (ULSD) versus regular gasoline.

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More Executive Appointments Announced for Phillips 66, ConocoPhillips

ConocoPhillips (NYSE: COP) on Jan. 11 announced additional appointments to the executive management teams for the two leading independent upstream and downstream energy companies that will be created when ConocoPhillips completes its strategic repositioning, expected in the second quarter of this year.

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Despite Court Setback, CARB Continues Low-Carbon Fuel Standard Work

Although a U.S. District Court in California recently ruled that California Air Resources Board (CARB) low-carbon fuel standard (LCFS) rules illegally restrict interstate commerce, CARB nevertheless continues its work on the LCFS.

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News from Middle East / Asia

UAE Diesel Subsidies Thwart Biodiesel Market Expansion

Government subsidies on conventional diesel fuel in the United Arab Emirates (UAE) are thwarting greater penetration of oilseed-derived, fatty acid methyl ester (FAME) biodiesel, according to a January 3 report from The National (UAE).

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Indonesia Earmarks US$436 Million for 110 CNG-Refueling Stations

The Indonesian government announced January 12 that it will push stated-owned Pertamina to open 110 new compressed natural gas (CNG) fueling stations in Java, in a bid to lessen private car dependence upon government-subsidized gasoline.

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Foster Wheeler Wins Petron Refinery-Upgrade Contract

Geneva, Switzerland-based Foster Wheeler AG announced January 17 that it won an engineering, procurement and construction contract for Petron Corp.’s “Refinery Master Plan-2” project at Bataan, Philippines.

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Wärtsilä Wins Contracts for Dual-Fuel Power Plants in Bangladesh

Finland-based marine engine and power-generation specialist Wärtsilä announced January 10 that it won two contracts to supply power-plant generating equipment to Bangladesh.

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Cat to Expand China R&D Center

Caterpillar announced January 4 that it signed an agreement to expand the company’s multi-functional research and development (R&D) center in Wuxi, China.

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China Yuchai Targeting 9% Jump in 2012 Diesel Engine Sales

China Yuchai International announced January 5 that its major operating subsidiary, Guangxi Yuchai Machinery (GYM), is targeting a 9.1% jump in 2012 diesel engine sales, compared to 2011 sales.

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News from Europe / Africa

Jacobs Wins Contract from Shell Germany for Refinery-Connection Project

Jacobs Engineering announced January 10 that it won a piping and pumping-station contract from Shell Deutschland Oil for a project that will connect two Shell refineries on opposite sides of the Rhine River in Germany.

Full Story >>

Neste Oil Completes ‘NExBTL’ Biojet-Fuel Test Flights with Lufthansa

Neste Oil announced January 12 that its test program with Lufthansa employing “NExBTL” all-hydrocarbon, bio-derived kero-jet fuel has now finished, with a Lufthansa intercontinental flight from Frankfurt to Washington, D.C., being the last flight.

Full Story >>

Repsol Shuts Bilbao CDU, FCC on Poor Refining Margins

Poor refining margins has forced Spanish oil and gas firm, Repsol YPF S.A., to shut one of two crude-distillation units (CDU) and a fluid catalytic-cracking (FCC) unit at its 220,000 barrel-per-day Bilbao refinery, according to a January 7 Reuters report citing an online company statement.

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Top Stories

RWE, Brain Developing Novel CO2-Conversion Schemes; Could Expand to Oil Refining

German-based electric power giant RWE announced January 4 that its partnership with biotech developer Brain AG on schemes to employ micro-organisms to capture and convert flue-gas carbon-dioxide (CO2) emissions could expand into oil-refining and waste-stream sectors.

Full Story >>

MAN Sees Diesel-Electric Hybrid Trucks Grabbing More Market Share

Germany-based diesel engine and vehicle maker MAN announced January 9 that it sees “high market potential” for diesel-electric hybrid trucks, following test programs with a local delivery truck operator in Bavaria.

Full Story >>

‘Greens,’ Public-Health Groups Urge U.S. EPA to Adopt ‘Tier-3’ Gasoline Sulfur Limits

U.S. environmental advocacy groups including Natural Resources Defense Council, Sierra Club, Union of Concerned Scientists and Environmental Defense Fund are joining with public-health advocacy groups including American Lung Association to pressure U.S. Environmental Protection Agency (EPA) to accelerate “Tier-3” regulations on gasoline sulfur content – along with tougher emissions limits on gasoline-powered cars.

Full Story >>

Obama Administration Rejects Keystone XL Pipeline Permit

U.S. President Barack Obama on January 18 rejected the permitting of TransCanada Corp.’s Keystone XL pipeline, a decision welcomed by environmental groups but blasted by the domestic energy industry.

Full Story >>

Novel Sulfur-Averaging Scheme Proposed for IMO Marpol Annex-VI Compliance

In what could prove to have a global impact on future demand for marine distillate fuels, the Cruise Lines International Association (CLIA) has come up with a novel sulfur-averaging scheme proposed for compliance with bunker fuel sulfur limits mandated by International Maritime Organization (IMO) Marpol Annex-6 legislation.

Full Story >>

‘Electrification Leadership Council’ Aims to Boost EV Markets

A new electric-vehicle (EV) advocacy group called “Electrification Leadership Council” (ELC) debuted January 6. Its members include FedEx Express, Hertz, Navistar, Azure Dynamics, A123 Systems, CODA Automotive, Pacific Gas and Electric Co., ECOtality, Automatiks and GE Capital.

Full Story >>

Drop-Off in Natural Gas Hedging Could Point to 2013 Output Pullback

Natural gas production should remain at roughly the same level as in 2011, but there could be a pullback by producers in 2013 because of the continued decline in the forward pricing curve, according to Barclays Capital.

Full Story >>

Profitable U.S. Refiner ULSD Exports: Give U.S. EPA Some Credit

While U.S. refiners years ago fought long and hard against U.S. Environmental Protection Agency’s (EPA) 15-parts-per-million sulfur limit in ultra-low sulfur diesel (ULSD), today they’re making far more money on high-quality ULSD – for both the U.S. and export markets – than on low sulfur gasoline.

Full Story >>

Mounting Losses Force Hovensa St. Croix Refinery Shutdown

Hovensa LLC., a joint venture between Hess and Petroleos de Venezuela S.A., announced January 18 that it will shut its 350,000 barrel-per-day refinery on St. Croix, U.S. Virgin Islands by mid-February and convert it into an oil-storage terminal.

Full Story >>

OriginOil, U.S. DOE Team Up to Convert Raw Algae into Renewable Crude Oil

Los Angeles-based OriginOil, Inc., a developer of a technology to extract oil from algae, announced January 13 that will co-develop an integrated system with the U.S. Department of Energy’s (DOE) Idaho National Laboratory (INL) for the direct conversion of raw algae into a renewable crude oil that can be used by existing petroleum refineries.

Full Story >>

Study: Refinery Closures, Gasoline Rule Could Drive Fuel Prices Up in W. Pennsylvania

The closing of three refineries in southeast Pennsylvania and a rule requiring special gasoline in the Pittsburgh region during the summer driving season could result in sharply higher gasoline prices and potential fuel shortages in the western part of the state, a forthcoming study commissioned by the Pennsylvania Petroleum Marketers and Convenience Store Association (PPMCSA) shows.

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New LNG-Powered Offshore Supply Vessels Seen Starting a Trend

Offshore supply vessels (OSVs) in the U.S. Gulf Coast region are seen as likely targets for switching to liquefied natural gas (LNG) for propulsion fuel – at least partly replacing marine gasoil (MGO) or heavy fuel oil (HFO) – according to a January 6 announcement from Houston-based classification society American Bureau of Shipping (ABS).

Full Story >>

Dow Taps UOP Technology to Convert Shale NGLs into Propylene

UOP LLC, a Honeywell company, announced January 5 that it has been selected by The Dow Chemical Co. to provide technology to produce on-purpose propylene from abundant natural gas liquids (NGLs) originating from North American shale trends at a Dow production site in Texas.

Full Story >>

Market Report

Fortnight Market Snapshot: ICE Brent Futures and ICE Gas Oil Futures

These charts show biweekly activity of the ICE Brent Futures and ICE Gas Oil Futures from January 10 to January 24.

Full Story >>

IEA: ‘Economic Weakness’ Trimming 1Q-2012 Global Refinery Runs

The latest International Energy Agency (IEA) monthly Oil Market Report (released January 18) finds that a weak global economy and relatively mild winter weather mean that global refinery crude runs for first quarter 2012 are likely to dip by 170,000 barrels/day (b/d) from the prior IEA forecast, to a total 74.9 million b/d.

Full Story >>

Cellulosic Ethanol: Navigating What’s Mandated and What’s Possible

In 2007, the U.S. Congress passed and then-President George W. Bush signed the Energy Independence and Security Act (EISA). In keeping with Bush’s 2006 State of the Union pledge to make ethanol production “not just from corn but from wood chips and stalks of switch grass,” the law included subsidies for cellulosic-ethanol production and mandates for its use.

By 2011, U.S. petroleum refiners were required to blend 250 million gallons of cellulosic material – made from wood chips or the inedible parts of plants like corncobs – into their transportation fuels. The mandate doubled for 2012, and by 2022, it will be 16 billion gallons.

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Scientists List Top Measures to Slash Non-CO2 GHG Emissions

A group of 24 climate scientists led by Drew Shindell of the U.S. National Aeronautics and Space Administration (NASA) Goddard Institute for Space Studies on January 13 published an article in Science detailing more than a dozen key steps to slash greenhouse gas (GHG) emissions other than carbon dioxide (CO2).

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European Commission Expert Group Ranks Alternative-Fuel Priorities

The European Commission announced January 13 the release of the second report from the “European Expert Group on Future Transport Fuels,” which recommends policies to encourage alt-fuels development.

Full Story >>